Document Content

DECISION No

DECISION No. 516/2003/QD-NHNN OF MAY 26, 2003 PROMULGATING THE REGULATION ON ORGANIZATION AND OPERATION OF THE MANAGING BOARDS, CONTROL BOARDS AND GENERAL DIRECTORS (DIRECTORS) OF NON-BANK CREDIT INSTITUTIONS

THE STATE BANK GOVERNOR

Pursuant to Vietnam State Bank Law No. 01/1997/QH10 and Credit Institutions Law No. 02/1997/QH10 of December 12, 1997;

Pursuant to Enterprises Law No. 13/1999/QH10 of June 12, 1999;

Pursuant to the Government’s Decree No. 86/2002/ND-CP of November 5, 2002 defining the functions, tasks, powers and organizational structures of the ministries and ministerial-level agencies;

Pursuant to the Government’s Decree No. 16/2001/ND-CP of May 2, 2001 on organization and operation of financial-leasing companies;

Pursuant to the Government’s Decree No. 79/2002/ND-CP of October 4, 2002 on organization and operation of financial companies;

At the proposal of the director of the Department for Banks and Non-Bank Credit Institutions,

DECIDES:

Article 1.- To promulgate together with this Decision the Regulation on organization and operation of the Managing Boards, Control Boards and General Directors (Directors) of non-bank credit institutions.

Article 2.- This Decision takes effect 15 days after its publication in the Official Gazette and replaces the previous regulations on organization and operation of the Managing Boards, Control Boards and General Directors (Directors) of non-bank credit institutions.

Article 3.- The director of the Office, the director of the Department for Banks and Non-Bank Credit Institutions, the heads of the concerned units under the State Bank of Vietnam, the directors of the State Bank’s branches in the provinces and centrally-run cities, the chairmen and members of the Managing Boards, the heads and members of the Control Boards, and General Directors (Directors) of the non-bank credit institutions shall have to implement this Decision.

For the State Bank Governor

Deputy Governor
TRAN MINH TUAN

REGULATION ON ORGANIZATION AND OPERATION OF THE MANAGING BOARDS, CONTROL BOARDS AND GENERAL DIRECTORS (DIRECTORS) OF NON-BANK CREDIT INSTITUTIONS

(Promulgated together with the State Bank Governor’s Decision No. 516/2003/QD-NHNN of May 26, 2003)

Chapter I

GENERAL PROVISIONS

Article 1.- Subjects and scope of application

1. This Regulation governs the organization and operation of the Managing Boards, Control Boards and General Directors (Directors) of the following types of non-bank credit institutions established and operating in Vietnam:

a/ Non-bank credit institutions affiliated to credit institutions, and financial companies affiliated to State corporations (hereinafter referred collectively to as affiliated non-bank credit institutions for short), which have their own Managing Boards and Control Boards.

b/ Joint-venture non-bank credit institutions and non-bank credit institutions with 100% foreign capital (hereinafter referred collectively to as non-bank credit institutions with foreign capital).

2. For joint-stock non-bank credit institutions, the regulations on organization and operation of their Managing Boards, Control Boards and General Directors (Directors) shall comply with the Regulation on organization and operation of the Managing Boards, Control Boards and General Directors (Directors) of joint-stock non-bank credit institutions, promulgated together with the State Bank Governor’s Decision No. 1087/2001/QD-NHNN of August 27, 2001.

3. For non-bank credit institutions affiliated to credit institutions without their own Managing Boards and Control Boards, the administration and control of these non-bank credit institutions shall rest with the Managing Boards and Control Boards of the credit institutions. The regulations on organization and operation of Managing Boards and Control Boards of credit institutions shall comply with such credit institutions’ charters and other guiding legal documents of the State Bank.

Article 2.- Interpretation of terms

In this Regulation, the following terms shall be construed as follows:

1. Non-bank credit institutions mean financial leasing companies defined in the Government’s Decree No. 16/2001/ND-CP of May 2, 2001 on organization and operation of financial leasing companies, or financial companies defined in the Government’s Decree No. 79/2002/ND-CP of October 4, 2002 on organization and operation of financial companies and other non-bank credit institutions.

2. Managing Board means the managing body of a non-bank credit institution, which is vested with full power to decide, in the name of such non-bank credit institution, on matters related to such institution’s objectives and interests, except for matters falling under the competence of Managing Boards of corporations or credit institutions (for affiliated non-bank credit institutions) or capital contributors (for non-bank credit institutions with foreign capital).

3. Control Board means a body inspecting financial activities of a non-bank credit institution; supervising the observance of the cost-accounting regime and operation of the internal inspection and audit system of such non-bank credit institution.

4. General Director (Director) means a person answerable to the Managing Board and law for the administration of daily activities of a non-bank credit institution.

Article 3.- Subjects ineligible for being elected to the Managing Boards or Control Boards or appointed as General Directors (Directors) are:

1. Persons who are being examined for penal liability.

2. Persons who have already been sentenced for serious crimes of infringing upon the national security, serious crimes of infringing upon ownership and/or serious economic crimes.

3. Persons who had been sentenced for other crimes but have not yet had their criminal records wiped out.

4. Persons who used to be Managing Board or Control Board members or General Directors (Directors) of bankrupt enterprises, except for cases prescribed in Clause 2, Article 50 of the Law on Enterprise Bankruptcy.

5. Persons who used to be representatives at law of enterprises suspended from operation for their serious law violations.

6. Persons who are subjects prescribed in Article 9, Article 90 of the Enterprises Law, Article 17 of the Ordinance on Officials and State Employees and Article 13 of the Ordinance on Corruption Combat.

7. Persons who are currently borrowing capital or acting as guarantors or re-guarantors of credits of the very non-bank credit institutions.

8. Persons whose parents, spouses or children are borrowing capital or acting as guarantors or re-guarantors of credits of the very non-bank credit institutions.

9. Persons who are shareholders owning over 10% of the charter capital or whose parents, spouses or children are owning over 10% of the charter capital of enterprises currently granted preferential credit by such non-bank credit institutions.

10. Persons who fail to satisfy the professional ethic, managerial capability and professional qualification criteria prescribed by the State Bank.

11. Persons who fail to satisfy other requirements prescribed in the charters of non-bank credit institutions.

12. Parents, spouses, children and blood siblings of Managing Board members or General Directors (Directors).

Article 4.- Cases of automatic loss of membership

1. Managing Board members, Control Board members and General Directors (Directors) shall automatically lose their membership or directorship in one of the following cases:

a/ They die or lose their civil act capacity.

b/ They lose their capacity as representatives managing the contributed capital portions of capital contributors being legal persons, or capital-contributing members being legal persons that terminate the capital contribution (in case of non-bank credit institutions with foreign capital).

c/ They fall into the subjects prescribed in Clause 1, 2, 3, 4, 5 or 6, Article 3 of this Regulation.

d/ They are expelled by the court from the territory of the Socialist Republic of Vietnam.

e/ Their non-bank credit institutions have their operation licenses withdrawn.

2. Posts held by the persons defined in Clause 1 of this Article and previously approved by the State Bank Governor shall automatically be invalid.

3. In case of automatic loss of capacity as Managing Board member or Control Board member or as General Director (Director) according to the provisions at Points a, b, c, d and e, Clause 1 of this Article, the Managing Boards of the non-bank credit institutions shall have to promptly submit written reports thereon enclosed with specific documentary evidences to the State Bank and take responsibility before law for the accuracy and truthfulness of these reports, and at the same time handle such cases according to the provisions in Articles 12, 18 and 22 of this Regulation.

Article 5.- Case of dismissal or removal from office

1. Chairmen and members of Managing Boards, heads and members of Control Boards, General Directors (Directors) of non-bank credit institutions shall be dismissed or removed from office in the following cases:

a/ Their civil act capacity is limited;

b/ They file resignation applications with plausible reasons;

c/ They violate the provisions in Clauses 7, 8, 9, 10, 11 and 12, Article 3 of this Regulation;

d/ They violate law provisions, regulations of the State Bank and the charters of the non-bank credit institutions in the course of performing their assigned tasks and exercising their vested powers.

e/ Other cases prescribed by the charters of the non-bank credit institutions.

2. Chairmen and members of Managing Boards, heads and members of Control Boards, General Directors (Directors), after being dismissed or removed from office, shall bear personal responsibility for their own decisions made during the period they hold such posts.

Article 6.- Case of temporary suspension

1. In cases where non-bank credit institutions are placed under special control, the heads of the special control boards at such non-bank credit institutions may temporarily suspend the management, control and administration rights of Managing Board members, Control Board members or General Directors (Directors) if they deem it necessary.

2. During the period of temporary suspension of their executive or control rights or pending the completion of the procedures for dismissal or removal from posts prescribed in Clause 1, Article 5 of this Regulation, members of the Managing Boards and members of the Control Boards may participate in meetings of their Managing Boards or Control Boards but shall not be allowed to vote.

Article 7.- Approval of posts

Chairmen and other members of the Managing Boards, heads and members of the Control Boards, General Directors (Directors) of non-bank credit institutions, who are elected, appointed, dismissed or removed from office, must be approved by the State Bank Governor.

Chapter II

MANAGING BOARDS

Section I: ORGANIZATION OF MANAGING BOARDS

Article 8.- Appointment and dismissal of Managing Board posts

1. For affiliated non-bank credit institutions: the Managing Board posts shall be appointed and/or dismissed by the chairmen of the Managing Boards of the corporations or credit institutions, and must be approved by the State Bank Governor.

2. For non-bank credit institutions with foreign capital: The Managing Board posts shall be nominated by representatives of the capital-contributing parties, appointed and dismissed by the chairmen of the Managing Boards of such non-bank credit institutions with foreign capital, and approved by the State Bank Governor.

Article 9.- Managing Board members

1. Managing Board members are persons who have prestige, professional ethics as well as knowledge of financial-banking activities, and are not the subjects prescribed in Article 40 of the Law on Credit Institutions and Article 3 of this Regulation.

2. Managing Board members who are concurrently General Directors (Directors) or Control Board heads shall be full-time members. Managing Board chairmen must not be oncurrently General Directors (Directors) or Deputy General Directors (Deputy Directors) of the same non-bank credit institutions.

3. Managing Board chairmen and other members must not authorize persons other than Managing Board members to perform their tasks or exercise their powers.

4. Managing Board chairmen must not join the Managing Boards of other credit institutions or take part in the management thereof, except for cases where such institutions are companies affiliated to the non-bank credit institutions.

5. The office term of the Managing Board members shall be between 2 and 5 years, prescribed by the Managing Boards and inscribed in the charters of the non-bank credit institutions. Managing Board members may be re-appointed. Part-time Managing Board members shall not be salaried but may enjoy allowances related to the Managing Board’s activities.

6. Number of members:

a/ The Managing Board of an affiliated non-bank credit institution shall have between 3 and 5 members, including full-time and part-time members; the number of Managing Board members, full-time members and part-time members shall be prescribed by the Managing Boards of the corporations or credit institutions and inscribed in the charters of the non-bank credit institutions.

b/ The number of members of Managing Boards of the non-bank credit institutions with foreign capital shall be between 3 and 11, including full-time members and part-time members; the number of Managing Board members, full-time members and part-time members shall be decided by the Managing Boards and inscribed in the charters of the non-bank credit institutions with foreign capital.

Article 10.- Meetings of Managing Boards

1. The Managing Boards of affiliated non-bank credit institutions must meet at least once a quarter. For non-bank credit institutions with foreign capital, their Managing Boards must meet at least once a year. Managing Boards may hold extraordinary meetings at requests of their chairmen or Control Board heads or General Directors (Directors) or two thirds or more of the Managing Board members, or other persons defined by the charters of the non-bank credit institutions.

2. Managing Board chairmen shall convene and chair meetings of Managing Boards; In cases where they are absent, they may authorize a Managing Board member to convene and chair a meeting.

3. A meeting of the Managing Board shall take place when it is attended by at least two thirds of the number of the Managing Board members. Each Managing Board member has one vote. Resolutions and decisions of the Managing Boards must be voted for by at least 50% of the total number of members attending the meetings and shall have the binding implementation effect on the non-bank credit institutions. In case of equal numbers of votes for and votes against, the final decision shall be on the side of the vote of the Managing Board chairman or the Managing Board member authorized by the Managing Board chairman to chair the meeting.

4. The Managing Board meetings must be fully recorded in the minutes book. The meeting chairman and secretary shall be jointly responsible for the accuracy and truthfulness of the Managing Board meeting minutes.

Article 11.- The Managing Board-assisting apparatus

1. The Managing Board shall use the executive apparatus and seal of the non-bank credit institution to perform its tasks.

2. A Managing Board shall have full-time assistants. It shall prescribe the number of its assistants (5 at most) as well as the tasks of each assistant.

Article 12.- Change of the posts of Managing Board chairman and members

1. For affiliated non-bank credit institutions:

a/ Within 30 days after the Managing Board chairman automatically loses his/her capacity as the Managing Board member, the Managing Board shall have to propose the Chairman of the Managing Board of the corporation or the credit institution to appoint a Managing Board chairman (who is fully qualified and satisfies the currently prescribed conditions), for submission to the State Bank Governor for approval.

b/ A Managing Board chairman who wishes to resign must file his/her application to the Managing Board of the non-bank credit institution and the chairman of the Managing Board of the corporation or credit institution. Within 60 days after receiving the application, the chairman of the Managing Board of the corporation or credit institution shall have to consider, decide on and carry out the procedures for dismissal, removal from office, and appointment of Managing Board chairman (who is fully qualified and satisfies the currently prescribed conditions), for submission to the State Bank Governor for approval.

c/ Managing Board members who wish to resign must file their applications or documents therefor to the Managing Board of non-bank credit institution and the chairman of the Managing Board of the corporation or credit institution for consideration and decision on removal from office appointment of Managing Board members, for submission to the State Bank Governor for approval.

2. For non-bank credit institutions with foreign capital:

a/ Within 60 days after the Managing Board chairman automatically loses his/her capacity as the Managing Board member, the capital-contributing party to the non-bank credit institution with foreign capital that currently holds the post of Managing Board chairman shall have to nominate its representative (who is fully qualified and satisfies the currently prescribed conditions) to hold the post of Managing Board chairman, then submit such to the State Bank Governor for approval.

b/ A Managing Board chairman who wishes to resign must file his/her application to the Managing Board and the capital-contributing party to the non-bank credit institution with foreign capital that currently holds the post of Managing Board chairman. Within 90 days after receiving the application, the capital-contributing party that currently holds the post of Managing Board chairman shall have to consider, decide on and carry out the procedures for dismissal, removal from office and appointment of the Managing Board chairman (who is fully qualified and satisfies the currently prescribed conditions), for submission to the State Bank Governor for approval.

c/ Managing Board members who wish to resign must file their applications or documents therefor to the Managing Board of, and capital contributors to the non-bank credit institution with foreign capital for consideration of and decision on the dismissal, appointment of Managing Board members, and for submission to the State Bank Governor for approval.

Section II: TASKS AND POWERS OF MANAGING BOARDS

Article 13.- Tasks and powers of the Managing Boards

1. For affiliated non-bank credit institutions:

a/ To manage non-bank credit institutions in compliance with the provisions of law, this Regulation and the charters of the non-bank credit institutions.

b/ To decide on matters related to the objectives and interests of non-bank credit institutions, except for matters falling under the competence of the Managing Boards of corporations or credit institutions.

c/ To receive capital sources and other resources assigned by the Managing Boards of the corporations or credit institutions; to decide on contribution of capital for purchase of equities or enter into joint ventures with other organizations or individuals at home.

d/ To submit to the State Bank Governor:

- Charters of non-bank credit institutions for ratification;

- The opening, closure of branches, representative offices; the establishment or dissolution of affiliated companies, for approval;

- The capital contribution, equity purchase, joint venture with foreign investors (for financial companies), for approval;

- The division, separation, consolidation, merger, buy-back, dissolution of non-bank credit institutions, for approval;

- Changes prescribed in Clause 1, Article 31 of the Law on Credit Institutions for approval;

- The election, appointment, dismissal, removal from office of chairmen and other members of Managing Boards, heads and other members of Control Boards, General Directors (Directors), for ratification;

- Independent audit organizations for auditing operations of non-bank credit institutions according to the State Bank’s regulations, for approval;

- Other matters prescribed by law.

e/ To submit to the Managing Boards of corporations or credit institutions:

- The increase or reduction of charter capital and other resources, for decision;

- The opening, closure of branches, representative offices; the establishment or dissolution of affiliated companies for decision;

- The division, separation, consolidation, merger, buy-back, dissolution of non-bank credit institutions, for decision;

- The election, appointment, dismissal, removal from office, of chairmen and other members of Managing Boards, heads and other members of Control Boards, General Directors (Directors), Deputy General Directors (Deputy Directors) and Chief Accountants, for decision;

- Business strategies and policies or long-term development plans, for approval;

- The operation regulations of Managing Boards, Control Boards and Executive Boards for decision on promulgation;

f/ To decide on the supplement and/or amendment to the charters and organizational structures of management apparatuses of the head offices, branches, representative offices and affiliated companies of non-bank credit institutions.

g/ To approve the business operation plans proposed by the General Directors (Directors).

h/ To prescribe general credit interest rates, commission rates, fee and fine levels applicable to customers according to the provisions of law.

i/ To decide on the deduction for setting up and use of funds.

j/ To approve the appointment, dismissal, removal from office section heads and deputy heads, directors and deputy directors of branches, heads of representative offices, directors and deputy directors of affiliated companies (if any).

k/ To formulate the operation regulations of Managing Boards, Control Boards and Executive Boards.

l/ To promulgate regulations on organization and activities of internal inspection and audit according to the provisions of law.

m/ To adopt general financial statements and annual settlements.

n/ To promulgate documents guiding in detail the implementation of the State’ and non-bank credit institutions’ policies, regimes and regulations on organization and operation.

o/ To perform other tasks and exercise other powers according to the provisions of law.

2. For non-bank credit institutions with foreign capital:

a/ To manage non-bank credit institutions in compliance with the provisions of law, this Regulation and the charters of the non-bank credit institutions.

b/ To decide on business strategies and policies; to approve long-term and annual development plans and other important matters of the non-bank credit institutions.

c/ To submit to the State Bank Governor:

- The charter for ratification;

- The increase or reduction of the charter capital, for ratification;

- The opening, closure of branches, representative offices; the establishment or dissolution of affiliated companies, for approval;

- The capital contribution, equity purchase, joint venture with foreign investors (for financial companies), for approval;

- The division, separation, consolidation, merger, buy-back, dissolution of non-bank credit institutions, for approval;

- Changes prescribed in Clause 1, Article 31 of the Law on Credit Institutions, for approval;

- The appointment, dismissal, removal from office of chairmen and other members of Managing Boards, heads and other members of Control Boards, General Directors (Directors), for approval;

- Other matters prescribed by law.

d/ To decide on the election, appointment, dismissal, removal from office of chairmen and other members of Managing Boards, heads and other members of Control Boards, General Directors (Directors), Deputy General Directors (Deputy Directors) and Chief Accountants.

e/ To decide on business strategies and policies; to approve long-term development plans, the operation regulations of the Managing Boards, the Control Boards and Executive Boards, as well as the organizational structures of management apparatuses of the head offices, branches, representative offices and affiliated companies.

f/ To ratify the regulation on recruitment, the regime of wages, rewards and allowances applicable to employees.

g/ To adopt general financial statements and annual settlements.

h/ To decide on the division of profits to the parties according to their capital contribution proportions.

i/ To promulgate documents guiding in detail the implementation of the State’ and non-bank credit institutions’ policies, regimes and regulations on organization and operation.

j/ To decide on the supplement and amendment to the charters; to decide on the capital contribution, equity purchase or joint venture with other organizations and individuals at home.

k/ To perform other tasks and exercise other powers according to the provisions of law.

Article 14.- Tasks and powers of the Managing Board chairmen

1. General provisions

a/ They are persons taking the general responsibility for all works of the Managing Boards, assigning tasks to the Managing Board members for the performance of tasks and the exercise of powers of the Managing Boards;

b/ To sign documents under the Managing Board’s competence for submission to the State Bank Governor and the relevant agencies;

c/ To sign resolutions, decisions and documents, or adopt documents under the competence of the Managing Boards for their implementation in the non-bank credit institutions;

d/ To convene and chair the Managing Board meetings and assign the Managing Board members to prepare agendas thereof;

e/ To perform other tasks and exercise other powers according to the provisions of law and the charters of the non-bank credit institutions.

2. For affiliated non-bank credit institutions: Apart from the provisions in Clause 1 of this Article, the Managing Board chairmen shall also have the following tasks and powers:

a/ To represent the Managing Boards, together with the General Directors (Directors), in signing for reception of capital and other resources assigned by the corporations or credit institutions;

b/ To sign documents under the competence of the Managing Boards for submission to the corporations or credit institutions.

3. For non-bank credit institutions with foreign capital: Apart from the provisions in Clause 1 of this Article, the Managing Board chairmen may authorize one of the standing Managing Board members at non-bank credit institutions with foreign capital to undertake their works and take responsibility before law for the assigned works. Powers and responsibilities of authorized Managing Board members shall be specified in the Managing Board chairmen’s letters of authorization.

Article 15.- Tasks and powers of Managing Board members

1. To perform the tasks and exercise the powers under the provisions of law, the regulations of the State, the charters of the non-bank credit institutions and the resolutions and decisions of the Managing Boards.

2. Managing Board members shall perform the tasks assigned by the Managing Board chairmen; they must not authorize other persons who are not Managing Board members to perform their tasks and exercise their powers.

Chapter III

CONTROL BOARDS

Section I: ORGANIZATION OF CONTROL BOARDS

Article 16.- Appointment and dismissal of the Control Board posts

1. For affiliated non-bank credit institutions: The Control Board heads and members shall be appointed and/or dismissed by the chairmen of the Managing Boards of the corporations or credit institutions and must be approved by the State Bank Governor.

2. For non-bank credit institutions with foreign capital: The Control Board heads and members shall be nominated by the representatives of the capital contributors, appointed and dismissed by the chairmen of the Managing Boards of the non-bank credit institutions, and must be approved by the State Bank Governor.

Article 17.- Control Board members

1. A Control Board is composed of between 3 and 5 members, of whom at least one is full-time member. The number of Control Board members and full-time members shall be prescribed by the chairmen of the Managing Boards of the corporations or the credit institutions, or the chairmen of the Managing Boards of the non-bank credit institutions with foreign capital, and inscribed in the charters of the non-bank credit institutions.

2. The office term of Control Board members is the same as that of the Managing Board members. Control Board members may be re-elected.

3. Control Board members are persons not falling within the subjects prescribed in Article 40 of the Law on Credit Institutions, satisfying the requirements for professional qualifications and ethics prescribed by the State Bank.

Article 18.- Change of posts of Control Board heads and members

1. For affiliated non-bank credit institutions:

a/ Within 30 days after a Control Board head automatically loses his/her Control Board membership, the Managing Board shall have to propose the chairman of the Managing Board of the corporation or credit institution to nominate or appoint a Control Board head (who is fully qualified and satisfies the currently prescribed conditions), for submission to the State Bank Governor for approval.

b/ A Control Board head who wishes to resign must file his/her application to the Managing Board and the Control Board of the non-bank credit institution and the chairman of the Managing Board of the corporation or credit institution. Within 60 days after receiving the application, the chairman of the Managing Board of the corporation or credit institution shall have to consider, decide and carry out the procedures for dismissal, removal from office and appointment of Control Board head (who is fully qualified and satisfies the currently prescribed conditions), for submission to the State Bank Governor for approval.

c/ Managing Board members who wish to resign must file their applications or documents therefor to the Managing Board and the Control Board of non-bank credit institution for submission to the chairman of the Managing Board of the corporation or credit institution for consideration and decision on dismissal and appointment of Managing Board members (who are fully qualified and satisfy the currently prescribed conditions), for submission to the State Bank Governor for approval.

2. For non-bank credit institutions with foreign capital:

a/ Within 60 days after a Control Board head automatically loses his/her Control Board membership, the representative of the capital-contributing party shall have to nominate a new Control Board head so that the chairman of the Managing Board of the non-bank credit institution make the appointment and dismissal, for submission to the State Bank Governor for approval.

b/ A Control Board head who wishes to resign must file his/her application to the Managing Board, the Control Board and the capital contributors to the non-bank credit institution. Within 90 days after receiving the application, the capital-contributing parties’ representatives shall have to nominate a new Control Board head for the chairman of the Managing Board of the non-bank credit institution to carry out the procedures for the dismissal or removal from office and appointment for submission to the State Bank Governor for approval.

c/ Managing Board members who wish to resign must file their applications or documents therefor to the Managing Board and the Control Board for submission to the capital-contributing parties to the non-bank credit institution with foreign capital for consideration and decision.

Section II. TASKS AND POWERS OF CONTROL BOARDS

Article 19.- Tasks and powers of the Control Boards

1. To inspect financial activities of non-bank credit institutions; to supervise the observance of the cost-accounting regime and the operation of the internal inspection and audit systems of non-bank credit institutions;

2. To evaluate annual financial statements of non-bank credit institutions; to inspect every specific matter related to financial activities of non-bank credit institutions; when they deem it necessary, or under decisions of the Managing Boards of non-bank credit institutions, the chairmen of the Managing Boards of the corporations or credit institutions or of the capital-contributing members of the non-bank credit institutions with foreign capital;

3. To regularly inform the Managing Boards of the operation results; to consult the opinions of the Managing Boards before submitting reports, conclusions and proposals to the Managing Boards of the corporations or credit institutions or the capital-contributing members of the non-bank credit institutions with foreign capital;

4. To report to the Managing Boards of the corporations or credit institutions or the capital-contributing members of the non-bank credit institutions with foreign capital on the accuracy, truthfulness and legality of the recording and keeping of documents as well as the making of accounting books and financial statements; and operation of the internal inspection and audit systems of the non-bank credit institutions;

5. To propose measures to supplement, amend or improve the financial activities of the non-bank credit institutions according to the provisions of law;

6. To be entitled to use the internal inspection and audit systems of non-bank credit institutions for the performance of their tasks;

7. To perform other tasks and exercise other powers according to the provisions of law and the charters of the non-bank credit institutions.

Article 20.- Tasks and powers of the Control Board heads and members

1. A Control Board head shall have the following tasks and powers:

a/ To convene the Control Board meetings;

b/ To represent the Control Board to convene extraordinary Managing Board meetings;

c/ To assign specific tasks to each Control Board member;

d/ To be responsible for directing the Control Board members in performing the tasks and exercising the powers of the Control Board; to be answerable to the Managing Board of the non-bank credit institution, the Managing Board of the corporation or credit institution, or the capital contributors to the non-bank credit institution with foreign capital for the operation of the Control Board;

e/ To authorize a Control Board member to undertake his/her work during his/her absence.

2. Control Board members shall have the following tasks and powers:

a/ To control business activities, check accounting books, assets, statements, final settlements of fiscal years and proposals on remedies for errors or violations (if any);

b/ To be entitled to request officials or employees of the non-bank credit institution to report on the situation and supply data on, and explain business activities;

c/ To report to the Control Board head on abnormal financial events, and take personal responsibility for their assessments and conclusions;

d/ To report in writing at least once a month on the control situation and results in their assigned domains to the Control Board head;

e/ To participate in the Managing Board meetings, state their opinions, make petitions, but not participate in voting. If they have opinions different from the Managing Board’s resolutions, they may request the recording of their opinions in the meeting minutes;

f/ Two thirds of the number of the Control Board members or more may request the Managing Board to convene extraordinary meetings in cases the Managing Board commits serious mistakes and/or violations;

g/ To be answerable before law, the Control Board head, the Managing Board of the non-bank credit institution, the Managing Board of the corporation or the credit institution or the capital-contributing members of the non-bank credit institution with foreign capital for the accuracy and truthfulness of data and dossiers related to activities of the non-bank credit institution. In cases where they conceal or fail to promptly request the handling of mistakes and violations, they shall bear joint responsibility while performing their tasks;

h/ To exercise other powers and perform other tasks provided for by the charters of the non-bank credit institutions.

3. Operation expenses, including wages and working conditions for Control Board members, shall be paid and ensured by the non-bank credit institutions. Part-time Control Board members shall enjoy remuneration.

Chapter IV

GENERAL DIRECTORS (DIRECTORS) OF NON-BANK CREDIT INSTITUTIONS

Article 21.- Functions of General Directors (Directors)

1. Operation of non-bank credit institutions shall be administered by their General Directors (Directors), who are assisted by a number of Deputy General Directors (Deputy Directors), Chief Accountant and professional apparatus.

2. General Directors (Directors) are legal person representatives of non-bank credit institutions, answerable to the Managing Boards and law for administering daily activities of non-bank credit institutions, and shall be appointed, dismissed or removed from office by the Managing Boards. For affiliated non-bank credit institutions, General Directors (Directors) shall be appointed, dismissed or removed from office by the chairmen of the Managing Boards of the corporations or credit institutions.

The appointment, dismissal and removal from office of General Directors (Directors) must be approved by the State Bank Governor.

3. General Directors (Directors) must not concurrently hold any executive posts in other credit institutions, except for affiliated companies of the non-bank credit institutions, and shall only be allowed to concurrently hold managerial or control posts in such affiliated companies;

4. General Directors (Directors), Deputy General Directors (Deputy Directors) of non-bank credit institutions must reside in Vietnam while they are in office.

5. Deputy General Directors (Deputy Directors) shall assist General Directors (Directors) in administering one or several operation domains of the non-bank credit institutions according to the assignment by the latter and be answerable to the latter and the law for the performance of the assigned tasks.

The appointment, dismissal and removal from office of Deputy General Directors (Deputy Directors) are prescribed in the charters of the non-bank credit institutions.

Article 22.- Change of the post of General Director (Director)

1. In cases where a General Director (Director) automatically loses his/her capacity as general director (director), the Managing Board must immediately nominate one Deputy General Director (Deputy Director) or one professional section head (in case of no Deputy General Director - Deputy Director) who satisfies the conditions prescribed by the State Bank and does not fall into the subjects prescribed in Article 3 of this Regulation to undertake the work of the General Director (Director) and promptly report such in writing to the State Bank.

2. Within 60 days after General Directors (Directors) automatically lose their capacity as general directors (directors) or after receiving resignation applications of General Directors (Directors):

a/ For affiliated non-bank credit institutions: The chairmen of the Managing Boards of the corporations or credit institutions shall have to find the replacements, and proceed with procedures for appointing new General Directors (Directors), then submit them to the State Bank Governor for approval.

b/ For non-bank credit institutions with foreign capital: Capital contributors that currently hold the post of General Directors (Directors) shall have to nominate new General Directors (Directors) for the Managing Board chairmen to proceed with procedures for dismissing and appointing General Directors (Directors), and submit them to the State Bank Governor for approval.

3. In cases where a General Director (Director) seriously breaches the provisions of law and the charter of the non-bank credit institution, the Managing Board may temporarily suspend the executive right of such General Director (Director), and at the same time promptly nominate one Deputy General Director (Deputy Director) who satisfies the conditions prescribed by the State Bank to undertake the work of the General Director, and immediately report thereon in writing and propose the handling of violations as well as the post of General Director (Director) to the State Bank and the chairman of the Managing Board of the corporation or credit institution or the capital-contributing party currently nominated to hold the post of General Director (Director) for approval.

4. Pending the State Bank Governor’s approval of the new General Director (Director), the Managing Board chairman and members, the Control Board head and members shall be fully responsible before law for all activities of the non-bank credit institution.

Article 23.- Tasks and powers of General Director (Director)

1. To sign, together with the Managing Board chairman, for reception of capital and other resources assigned by the corporation, credit institutions or capital contributors to the non-bank credit institution with foreign capital, for management and use.

2. To submit to the Managing Board:

a/ Amendments and/or supplements to the charter of the non-bank credit institution;

b/ Opening and termination of operation of branches, representative offices and affiliated companies;

c/ Organizational structure of the managerial and executive apparatus at the head office; the organizational structures of executive apparatuses of branches, representative offices and affiliated companies;

d/ Appointment, dismissal and removal from office of Deputy General Directors (Deputy Directors), Chief Accountant; directors of branches, representative offices, representative offices and affiliated companies according to the charter of the non-bank credit institution;

e/ Operation regulations of branches, representative offices and affiliated companies;

f/ Interest rates, commission percentages, charge and fine levels applicable to customers according to the provisions of law;

g/ Business operation plans; plans for use of after-tax profits;

h/ Contribution of capital to, purchase of equities from, enterprises and other credit institutions (for financial companies);

i/ Division, separation, consolidation, merger, buy-back and/or dissolution of the non-bank credit institution;

j/ Changes defined in Clause 1, Article 31 of the Law on Credit Institutions;

k/ Selection of independent audit organizations to audit operations of the non-bank credit institution;

l/ Specific guidance on the implementation of the State’s policies and regimes on financial and banking activities.

3. To decide on the appointment, dismissal and removal from office of the heads and deputy heads of professional sections at the head office; directors, deputy directors, heads and deputy heads of sections of the branches, representative offices and affiliated companies. The appointment and removal from office of the above-said posts must be approved by the chairman of the Managing Board of the non-bank credit institution. To recruit, discipline and dismiss staff members of non-bank credit institutions; and to decide on wages and allowances for laborers, including managerial officials under the appointing competence of General Directors (Directors) in strict compliance with law and the regulation promulgated by the Managing Board of the non-bank credit institution.

4. To organize the implementation of business operation plans and after-tax profit use plans after they are adopted by the Managing Board.

5. To administer and decide on matters related to business activities of the non-bank credit institution in strict compliance with law, the charter of the non-bank credit institution as well as resolutions and decisions of the Managing Board; to be responsible for business results of the non-bank credit institution.

6. To represent the non-bank credit institution in international relations, litigations, disputes, dissolution and bankruptcy.

7. To decide on the application of measures ultra vires in emergency cases (natural disasters, enemy sabotage, fires, incidents), be responsible for their decisions, and promptly report such to the Managing Board, the State Bank and other competent State agencies for further handling.

8. To be subject to the inspection and supervision by the Managing Board, the Control Board, the State Bank and other competent State agencies over the performance of his/her executive tasks.

9. To report to the Managing Board, the State Bank and other competent State agencies defined by law on the business operation result of the non-bank credit institution.

10. To exercise other powers and perform other tasks under the provisions of law, the charter of the non-bank credit institution and decisions of the Managing Board.

Chapter V

ORDER, PROCEDURES AND DOSSIERS FOR APPROVAL OF APPOINTMENT AND DISMISSAL OF MANAGING BOARD MEMBERS, CONTROL BOARD MEMBERS, GENERAL DIRECTORS (DIRECTORS)

Article 24.- Dossiers and procedures for the appointment and dismissal

1. For affiliated non-bank credit institutions:

Within 15 working days after adopting the dismissal or removal from office of the posts of Managing Board chairmen and members, Control Board heads and members, General Directors (Directors) upon the expiry of or during the terms of office of the Managing Boards, the Control Boards and administrators of non-bank credit institutions, the non-bank credit institutions shall have to complete and send dossiers to the State Bank. Each dossier comprises:

a/ A report of the Managing Board chairman (or an authorized person) requesting the State Bank Governor to approve the appointment and dismissal of posts. The report must certify that the persons proposed for appointment approval do not violate Article 3 of this Regulation, are fully qualified and satisfy all the conditions and criteria according to the current provisions of law.

b/ Decisions of the chairman of the Managing Board of the corporation or credit institution on appointment or dismissal of the posts of Managing Board members, Control Board members and General Directors (Directors) of the non-bank credit institution;

c/ Minutes of the Managing Board’s meeting on appointment and dismissal of the posts of Managing Board member, Control Board member and General Director (Director);

d/ Curricula vitae (the originals) of the persons proposed to be approved for appointment to the posts of the Managing Board or Control Board member and General Director (Director) of the non-bank credit institution (made according to the set form);

e/ Copies of already notarized diplomas of the persons proposed to be approved for appointment to the posts of the Managing Board or Control Board member and General Director (Director) of the non-bank credit institution;

f/ The originals of resignation applications of persons currently holding the above-said posts (for case of removal from office);

g/ Other relevant documents.

2. For non-bank credit institutions with foreign capital:

Within 30 days after adopting the appointment and dismissal of the posts of Managing Board chairmen and members, Control Board heads and members, General Directors (Directors) upon the expiry of or during the terms of office of Managing Boards, Control Boards and administrators of non-bank credit institutions with foreign capital, such non-bank credit institutions shall have to complete and send dossiers to the State Bank. Each dossier comprises:

a/ A report of the Managing Board chairman (or an authorized person) requesting the State Bank Governor to approve the appointment and removal from office of posts. The report must certify that the persons proposed for approval do not violate Article 3 of this Regulation, are fully qualified and satisfy all the conditions and criteria according to the current provisions of law.

b/ Decisions of the chairman of the Managing Board of the corporation or credit institution on appointment or dismissal of the posts of Managing Board member or Control Board member and General Director (Director) of the non-bank credit institution;

c/ The capital contributors’ written nominations to the posts of Managing Board or Control Board member and General Director (Director) of the non-bank credit institution with foreign capital;

d/ Minutes of the Managing Board’s meetings on appointment and dismissal of the posts of Managing Board member or Control Board member and General Director (Director). In cases where the Managing Board’s meetings cannot be held to decide on the appointment or dismissal of the above-said posts, the Managing Board members shall clearly state their opinions in writing;

e/ Curricula vitae (the originals) of the persons proposed to be approved for appointment to the posts of Managing Board member or Control Board member and General Director (Director);

f/ Copies of already notarized diplomas of the persons proposed to be approved for appointment to the posts of the Managing Board member or Control Board member and General Director (Director);

g/ The originals of resignation applications of persons currently holding the above-said posts (for case of removal from office);

h/ Other relevant documents.

Article 25.- Approval by the State Bank

1. Within 15 working days after receiving complete dossiers according to the current regulations, the State Bank shall have to consider and decide to approve or request in writing the non-bank credit institutions to supplement or further explain the dossiers. In cases where the Managing Boards of non-bank credit institutions, past 45 days after the State Bank requests in writing the supplement to or further explanation of their dossiers, fail to complete their dossiers as requested, the State Bank shall not consider the posts proposed for approval.

2. The persons, who have already been appointed to the posts in the non-bank credit institutions but not approved by the State Bank Governor due to their failure to satisfy the currently prescribed criteria and conditions or failure to supplement or explain their dossiers within the prescribed time limit, shall not be allowed to continue performing the work of the appointed posts.

3. In cases where some posts of Managing Board member, Control Board member and General Director (Director) are still vacant, the remaining Managing Board members and Control Board members of the non-bank credit institutions shall be responsible before law and the State Bank for the management and administration of business activities of their non-bank credit institutions; and at the same time, they shall have to expeditiously carry out the procedures for dismissing or appointing persons to the vacant posts according to the provisions of this Regulation and the charters of the non-bank credit institutions, for submission to the State Bank for consideration and decision.

Chapter VI

IMPLEMENTATION PROVISIONS

Article 26.- The amendment and supplementation of provisions of this Regulation shall be decided by the State Bank Governor.

For the State Bank Governor

Deputy Governor
TRAN MINH TUAN